Help - Stamp Duty advice

Axson

Hello All,


I am currently in the process of purchasing a property and have for the past 6 months been told by our Mortgage advisor (whom my family and I have trusted for years) that I am having to pay the higher rate of stamp duty for reasons beyond my control.


Unfortunately my father passed away of motor neurone disease in 2011 and I, without thinking (being a naïve 25 year old) bought my mother a house with their remaining equity and mortgaged a relatively small percentage of the remaining balance. Technically whilst the mortgage is for my dependant mother and she does not contribute towards it in anyway shape of form, the house is hers, yet on paper it is I who is the owner. I am now purchasing my own property for the first time with my long term partner who was clearly loathed to find out that as her first house purchase, even she cannot avoid the stamp duty increase, instead of £4,000.00 - we're looking around £12,000.00


I have seen some information around the internet that there are available companies who will allow joint mortgages with sole ownership, even for long term partners who are not wed or in a civil partnership, I am absolutely confused with mixed information about what to do and where we go from here.


I even spoke to HMRC and to quote the conversation


HMRC "Do you own another property"
Me "Yes and this is the scenario"
HMRC "Then you owe us the increased stamp duty"
Me "Thanks"


Any advice is greatly welcomed, whilst I may have done this before, I was quick to do it and was just helping my mother out of a horrible situation, I am not a landlord who is trying to buy up multiple properties to make an income, We just want to buy our first house together.

Bluebirdman_of_Alcathays

The whys and why not's are irrelevant - you own a property, and will be subject to the higher rate of SDLT. Your options are:


Dispose of the house you currently own - you say it has a low mortgage, can your mother buy it off you? Edited to add - there could be CGT implications if you go down this route, but we would need to know numbers.


Get your partner, and them alone, to purchase the new property. I don't know of a mortgage product that will allow sole ownership with a joint mortgage - has your mortgage broker heard of one?

marksoton

There's no if's or but's, you're a landlord.

Are the mortgage company aware of this setup?

Axson

Thank you for your comments, unfortunately my mother is too old to get the mortgage now in her own name, and I will not dispose of the property, that is her house as far as I'm concerned.

booksurr

sole ownership, joint mortgage used to be possible as you appear to have already identified from internet searching

whether any lenders still do it is another matter that you will only resolve by asking a (decent) mortgage broker - have you tried the mortgage board rather than here on the housing board?

Cheeky_Monkey

Axson wrote: »

I have seen some information around the internet that there are available companies who will allow joint mortgages with sole ownership, even for long term partners who are not wed or in a civil partnership, I am absolutely confused with mixed information about what to do and where we go from here.

I even spoke to HMRC and to quote the conversation

HMRC "Do you own another property"
Me "Yes and this is the scenario"
HMRC "Then you owe us the increased stamp duty"
Me "Thanks"

So have you approached any of these companies?

As others have said, it doesn't matter why you bought the house, you are the legal owner and that's all there is to it.

[Deleted User]

So £8k would put you back to square one with affordability for your new place with your partner?

Could you safely remortgage the house your mother lives in to release that £8k of equity, i.e. without risking your ability to keep paying the mortgage and therefore your mother's security in her home, and without the repayments on your mother's home getting in the way of your affordability for your own home?

I'm not suggesting you should milk it for all it's worth, but it may help you across this bridge with all parties securely housed and happy.